EuropEan Banking union - Constitutional Change through Euro

European Banking Union
Democracy, Technocracy and the State of Integration
Scientific Organisers: Pepper D. Culpepper, Stefan Grundmann, Adrienne Héritier, Hans-W. Micklitz
European University Institute
Sala Europa, Villa Schifanoia
Via Boccaccio, 121 – Firenze
22-23 May 2015
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Context
In 2012, at the height of the sovereign debt crisis, European decision makers decided that the next step in
developing an ever closer union involved the formation of banking union (BU). Now that the banking union
has taken shape, this conference will bring together social scientists from several disciplines to discuss the
nature of the political processes that gave rise to the banking union. Which players were involved, and with
what consequences, in the different stages of the decision-making process? To what extent has there been a
trade-off between efficient problem solving, on the one hand, and democratic legitimation through an open
political process, on the other?
One important goal of the reform was to break the dangerous link between government debt and national
banks buying government bonds to finance this debt. In June 2014 member states and the European
Parliament decided to create a single resolution mechanism (SRM), the second building block of the BU,
after the first step of the single supervision mechanism (SSM) had been introduced in 2013 to create a
unified system to handle banks in crisis. The political decision-making that resulted in the two mechanisms
involved difficult bargaining between governments with diverging preferences, particularly with respect to
the mutual insurance of bank deposits in case of bank failure, but also as regards the distribution of decisionmaking competences under both the SSM and the SRM. Three conflicts of interest emerged: between
debtor and creditor states; between member states favouring a centralization of competences and member
states resisting centralization in the supervision and resolution; and between stakeholders of banks and of
governments trying to protect the interests of taxpayers. Understanding how the institutional arrangements
adopted reflect these tensions, and how these tensions are likely to influence the future functioning of the
BU, is a central intellectual concern of the conference.
A second major theme is the relationship between technocratic governance and democratic oversight.
The SSM was introduced on the basis of a unanimity vote of member states. The European Parliament gave
its support after it had been granted more powers than originally envisaged over the appointment of top
officials at the new single supervisor and after obtaining better access to information from the ECB in its
supervision of banks. In the case of the resolution of failing banks, the decision-process still significantly
involves national decision-makers. Burden sharing in rescuing or resolving a failed bank has been watered
down. While bail-in rules will first burden bond-holders with more costs of a failure, in a further step member
governments will be financially responsible. The mutual rescue fund of 55 billion Euros is relatively small
and will be built up over 8 years. The upshot of the modest SRM compromise is that the ECB is indirectly
gaining more competences, because it is under more pressure to correctly assess banks balance sheets in the
supervision of banks so that they can withstand another shock.
The organization of the panels draws on the specific expertise of invited participants to shed light on these
general issues at the intersection of law, politics, and economics. A first panel focuses on technocratic and
centralized decision making in the BU, emphasizing the process and its particular constitutive element for
the building of a new European banking union. The second session considers the inherent constitutional
dimension of the project, comparing the BU as a step of constitutionalisation to the EU constitution building
after the establishment of the competition order in the 1960s and 1970s. The two afternoon panels on
Friday look into the overall systemic impact of the deepening of integration through the BU: what are the
consequences for the overall institutional architecture of the EU, in particular as regards the democratic
legitimation in the EU? The Saturday panel returns to how the political play of power in building the BU
will influence its likely functioning, and the final roundtable takes two different disciplinary perspectives to
anticipate the future functioning and potential dysfunctions of the banking union.
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Programme
Friday 22 May
09.00 – 09.30
Conference Registration and Coffee
09.30 – 09.45
Introduction and Welcome by Organizers
09.45 – 11.00
Technocratic and Centralised Decision-Making in Banking Union
Niamh Moloney | London School of Economics
Hans Micklitz | EUI
Commentator: Adrienne Héritier | EUI
11.00 – 11.30 Coffee break
11.30 – 13.00 A Second Step of Integration through Constitutionalisation? From Competition to Banking Union
Karel Lannoo | Centre for European Policy Studies
Heike Schweitzer | Free University of Berlin
Stefan Grundmann | EUI
Commentator: Giorgio Monti | EUI
13.00 – 14.00 Lunch (Sala Bandiere)
14.00 – 15.15 Integration Without Democracy? Part I
Sergio Fabbrini | LUISS Rome
Christoph Möllers | Humboldt University Berlin
Commentator: Philippe Schmitter | EUI
15.15 – 15.45 Coffee break
15.45 – 17.15 Integration Without Democracy? Part II
Erik Jones | SAIS Europe, Johns Hopkins University
Johannes Lindner | European Central Bank
Commentator: Pepper Culpepper | EUI
Cocktail and dinner (by invitation only)
Saturday 23 May
10.00 – 12.00 Concluding Roundtable: The Banking Union in 2020
Armin von Bogdandy | Max Planck Institute for Comparative
Public Law and International Law Heidelberg
Martin Hellwig | Max Plank Institute for Research on Collective Goods Bonn
Brigid Laffan | EUI
12.00 – 13.00 Lunch (Sala Bandiere)
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Participants
Pepper D. Culpepper
European University Institute
Sergio Fabbrini
LUISS Rome
Stefan Grundmann
European University Institute
Martin Hellwig
Max Plank Institute for Research on Collective Goods Bonn
Adrienne Héritier
European University Institute
Erik Jones
SAIS Europe, Johns Hopkins University
Brigid Laffan
European University Institute
Karel Lannoo
Centre for European Policy Studies
Johannes Lindner
European Central Bank
Hans-W.Micklitz
European University Institute
Christoph Möllers
Humboldt University Berlin
Niamh Moloney
London School of Economics
Giorgio Monti
European University Institute
Robert Rebhahn
University of Vienna
Philippe Schmitter
European University Institute
Heike Schweitzer
Free University of Berlin
Klaus Tuori
University of Helsinki
Armin von Bogdandy
Max Planck Institute for Comparative Public Law and
International Law Heidelberg